Exclusive: S&P's flub-filled draft press release

Ahead of its downgrade of the U.S.’s AAA rating Friday night, Standard & Poor’s sent a draft press release — obtained by POLITICO — to the Treasury Department that afternoon that included several numerical errors, setting off a heated back-and-forth as officials tried to correct the credit firm’s work.

The draft press release, according to POLITICO’s Morning Money, included projections that overestimated U.S. debt by $2 trillion. The initial projections were the general government debt-to-gross domestic product ratio would rise to 81 percent in 2015 and 93 percent by 2021.

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Downgrade blame game

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In the final release, those numbers were revised down to 79 percent and 85 percent, respectively. Treasury officials noted that the corrected numbers put U.S. debt in line with other AAA-rated nations, including the United Kingdom and France, arguing that the U.S. ratio won’t reach France’s level for a decade.

The draft release had a bullet point about the debt-to-GDP ratio near the top of its release, but, with less grim numbers, pushed it lower in the final version that was released to the public, leading with concerns that “the effectiveness stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenge.”

In an interview with NBC that aired Sunday night, Treasury Secretary Timothy Geithner blasted the decisions made by Standard & Poor’s.

“I think S&P has shown really terrible judgment,” he said. “They have handled themselves very poorly and have showed a stunning lack of knowledge about basic U.S. fiscal budget math. And I think they drew exactly the wrong conclusion.”

The draft release said: “Even if the government fully implements [the debt ceiling] agreement, we project that the U.S.’s net public debt burden will continue to grow through the middle of the decade-and potentially beyond. Under our base case scenario, U.S. net public debt rises from 74% of GDP to 81% in 2015, and 93% by 2021. By contrast, for ‘AAA’ sovereigns we view as key peers of the U.S. - Canada, France, Germany, and the U.K. - we project their net public debt burdens to decline by, or even before, 2015.”

In the final release, it became: “Under our revised base case fiscal scenario—which we consider to be consistent with a ‘AA+’ long-term rating and a negative outlook—we now project that net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 79% in 2015 and 85% by 2021.”

Readers' Comments (179)

Oh, timmy, timmy, timmy. You clowns did not cut enough. You did not do enough to turn this spending around. We need cuts NOW, not over 10 years. And timmy I heard you say during this great debate "There is no chance of a AAA downgrade". You are a no-nothing, tax evader who has no clue. You are over your head and you and the administration own this mess.

Oh, timmy, timmy, timmy. You clowns did not cut enough. You did not do enough to turn this spending around. We need cuts NOW, not over 10 years. And timmy I heard you say during this great debate "There is no chance of a AAA downgrade". You are a no-nothing, tax evader who has no clue. You are over your head and you and the administration own this mess.

No. The tea nuts caused this downgrade.

The administration can argue with the math if they want, but they ignore this simple fact.

The math is irrelevant.

S&P did not downgrade us because they think the U.S. will not pay it's bills. The U.S. Treasury is still the safest place to put your money.

S&P downgraded us because the tea party manufactured debt ceiling crisis presented the possibility that we wouldn't pay our debts.....intentionally.

No, the Tea Party just told us the emporer has no clothes. Is it their fault that we all see him naked?

And yes, we do need cuts NOW. And there is no reason not to do it. There is waste, fraud, sleazy deals, pocket lining, pork filled deals and rampant mismanagement in goverment bureacracy. We need smaller government and true patriots to run that government, not clowns, crooks and dummies.

Obummer and the dems wanted a "clean" debt limit deal - no cuts or debt reform. They came to this deal kicking and screaming. Well, now we, the people, are screaming and the the momentum is building.

“I think S&P has shown really terrible judgment,” he said. “They have handled themselves very poorly and have showed a stunning lack of knowledge about basic U.S. fiscal budget math. And I think they drew exactly the wrong conclusion.”

I think Obama and the dems have shown terrible judgement continuing to overspend $1.50 for every $1.00 coming in and for Obama to send out Axelrod, Kerry and the rest of the democrat liars to the Sunday talk shows and blame the Tea Party for their massive overspend is trying to draw the exact wrong conslusion. Futhermore, those dems who blame the Tea Party for their massiver overspending are dogpoop americans.

S&P downgraded us because the tea party manufactured debt ceiling crisis presented the possibility that we wouldn't pay our debts.....intentionally.

The "tea party" was/is against all the new Obama spending. That's what caused the downgrade. What you are saying is like trying to blame the postman for the bad news about your financial bad behavior he brings.

But then John Chambers would make a great member of obama's staff. He ran Wang into the ground; was dumped by Cisco when, after huge growth during a hot economy, was unable to deliver the profits. On top of all this, he was co-chair of McCains election team. Enough said?

Plus, has anyone asked about China's credit rating? Last I saw, it was A.

Why should anyone trust S&P's analysis? This is the same bunch that gave mortgage backed securities and credit-default swaps a sound endorsement leadig to the financial diaster of 2008 and eventually TARP. They are clearly incompetent and therefore totally irrelevant.

No, the Tea Party just told us the emporer has no clothes. Is it their fault that we all see him naked?

You only see what your ideology has told you to see, jr.....lol....and the funny part is that you admitted your delusion.

And yes, we do need cuts NOW. And there is no reason not to do it. There is waste, fraud, sleazy deals, pocket lining, pork filled deals and rampant mismanagement in goverment bureacracy. We need smaller government and true patriots to run that government, not clowns, crooks and dummies.

No, we do not need cuts now. We need to plan for the long term, kid.

Every independent or bi-partisan study finds this.

It is only with in the tea nut delusion where we need cuts now.

The reason not to do it now is the economy. And those same reports state as much.

You live in a delusional, imaginary utopia. Wake up.

Obummer and the dems wanted a "clean" debt limit deal - no cuts or debt reform. They came to this deal kicking and screaming. Well, now we, the people, are screaming and the the momentum is building.

Obviously they wanted a clean det limit deal. Just like what presidents usually get.

We would have avoided this whole embarrassing show the tea nuts forced on us, and also would have avoided a downgrade.

Please drop the delusion. It is hurting this country, and the economy.

I think Obama and the dems have shown terrible judgement continuing to overspend $1.50 for every $1.00 coming in and for Obama to send out Axelrod, Kerry and the rest of the democrat liars to the Sunday talk shows and blame the Tea Party for their massive overspend is trying to draw the exact wrong conslusion. Futhermore, those dems who blame the Tea Party for their massiver overspending are dogpoop americans.

I think you should find out what makes up the debt, and yearly deficits.

I also think you should read the S&P report, which specifically states that it was the tea nut created debt ceiling fight that led to the downgrade.

The democrats did not draw the wrong conclusion.

The democrats read the report.

You did not, for it would contridict the delusion you hold so dear.

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We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process.

The "tea party" was/is against all the new Obama spending. That's what caused the downgrade. What you are saying is like trying to blame the postman for the bad news about your financial bad behavior he brings.

The tea nuts, and you, have no idea as to what Obama has spent.

You only believe what prolongs your delusion.

And again. S&P was specific in what caused the downgrade. It was caused by the tea nut created debt ceiling debacle. In addition, they mentioned the GOP's refusal to consider revenue several times as something that is contributing to the gridlock.

I am saying I am blaming the people who are responsible for the reasoning S&P gave for downgrading us.

You simply did no research. You once again simply parroted the crap you were fed....preserving your delusion, kid.

S & P was not the first to downgrade our credit rating it was Egan Jones back in July. I guess no one found it necessary to report that.

I really don't see this as a partisan issue. Both sides are responsible. Thank God the Tea Party has put it in the forefront of the debt ceiling debate. I have been calling my representatives in Washington for the last 25 or so years thanking them for selling us down the river. So to blame one particular party and especially the Tea Party is asinine! But then again nobody said Americans has any common sense.

Before it was tsunamis, eathquakes, and Europe. Now it's all the Tea Party and S&P's fault. Part of growing up is taking responsibility for your actions, but the boy in the WH has parties to attend, rounds of golf to play, and a bus tour across the midwest.

It's not about "studies" it's about arithmatic. We spend $1.50 for every $1.00 coming in. We've been doing that for 3 years. And even with the "deficiet reduction plan" we are not cutting spending, we are only slightly decreasing the rate of growth. Over 10 years the deficiet reduction deal adds what is it? $8T instead of $10T over the next 10 years? The federal government has been, is and plans on continuing on being fiscally isrresponsible. Calling people pointing this out "terrorists" and blaming them for the problem is not reality based.

I really don't see this as a partisan issue. Both sides are responsible. Thank God the Tea Party has put it in the forefront of the debt ceiling debate. I have been calling my representatives in Washington for the last 25 or so years thanking them for selling us down the river. So to blame one particular party and especially the Tea Party is asinine! But then again nobody said Americans has any common sense.

It is not asinine to blame the tea nuts.

They are the ones who made the debt ceiling an issue.

S&P did not downgrade us because they do not think we can pay our debts. They downgraded us because the tea nuts showed they may be able to force us to not pay them....willingly.

It's not about "studies" it's about arithmatic. We spend $1.50 for every $1.00 coming in. We've been doing that for 3 years. And even with the "deficiet reduction plan" we are not cutting spending, we are only slightly decreasing the rate of growth. Over 10 years the deficiet reduction deal adds what is it? $8T instead of $10T over the next 10 years? The federal government has been, is and plans on continuing on being fiscally isrresponsible. Calling people pointing this out "terrorists" and blaming them for the problem is not reality based.

It is not about studies to you and your spoon fed delusion....for the studies do not show what your ideology has fed you, kid.

We are spending so much not because of Obama's policies, but because of the lost federal revenue and increased manditory outlays due to the recession, as well as leftover spending and interest from the last administration.

This administrations policies are responsible for about $1.5 trillion of our recent debt.

Like I said, study up kid.

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The reason, if you could just drop the ideology and think for a second, that we need a long term solution, and should not blindly cut now, is because any cuts or taxes in the short term will hurt economic recovery.

And if you hurt economic recovery, it will be harder to deal with the debt for revenues will remain low, and manditory outlays high.

The tea nuts are to blame for this downgrade. It is obvious. The report states it. Sorry to bust the delusion.

Maybe you should stop blindly listening to your ideology, and start thinking for yourself?

I am saying I am blaming the people who are responsible for the reasoning S&P gave for downgrading us.

You simply did no research. You once again simply parroted the crap you were fed....preserving your delusion, kid.

The Political Situation: Aug. 8, 2011 - 8:34 AM EST

Please drop the delusion. It is hurting this country, and the economy.

I'm not the delusional one here. Also, I'm not insulting you. Listening to the S&P guy on the Sunday shows, the downgrade had more to do with the lack of seriousness on controling spending and providing a viable plan for debt retirement. A few trillion either way didn't make a difference. And for the Obombunists to name-call rather than address the overspending problem doesn't help.